PETALING JAYA: Sumatec Resources Bhd is expected to see an estimated loss of RM761.69 million arising from the suspension and termination of the joint investment agreement with CaspiOilGas LLP (COG) and Markmore Energy (Labuan) Ltd.
Sumatec said the abolition will directly cause the expiration of substantial investment and forfeiture of its deposit on the Rakushechnoye oil and gas field, including the value of working interest (RM272.326 million), exploration and development cost (RM201.263 million) and performance deposit (RM127.1 million).
Meanwhile, the total loss which includes remedied estimates arising from COG’s complaints are estimated to be RM161million.
“We remain in contact with COG and Markmore Energy to seek their indulgence to give us more time and we believe our appeal to lift the suspension and termination notices can be given a positive results if we manage to resolve our current issues mainly caused by the legacy shipping debts, which should not have existed anymore since the last regularisation exercise of May 2013,” Sumatec said in a Bursa filing.
In the meantime, the group said it has come up with a plan of action.
Firstly, it will undertake a fund raising exercise involving a rights issue to raise up to RM100 million. In addition, a settlement agreement had been reached with Sumatec’s creditors involving a settlement amount of 15 sen in respect of every RM1 owed to the creditors.
“[There is a] proposal by the company to participate in the Condensate Extraction Plant belonging to Markmore Energy. This is the positive part of the relationship and we are striving hard to remove the legal problem,” the group said.
To recap, on Oct 7, Sumatec Oil And Gas LLP (SOG), Sumatec’s wholly owned subsidiary, received a notice from COG terminating its joint investment agreement and novation agreement effective Oct 17.
In the termination notice, COG highlighted the constraints faced under Sumatec’s current financial and legal predicaments which impacted SOG’s ability to comply with its obligations to carry out appropriate investment/work programmes and to provide necessary funding for the petroleum operation under the joint investment agreement.
On March 8, 2012, Sumatec entered into the joint investment agreement with Markmore Energy and CaspiOil for the development and extraction of hydrocarbon in the Rakushechnoye oil and gas field.
SOG was meant to carry out all operations related to the production of petroleum production, for and on behalf of CaspiOil, to study, appraise, develop, and produce the relevant petroleum reservoirs of the oil field.
